(1) Compensatory
mitigation. - The restoration, creation, enhancement, or preservation of
jurisdictional waters required as a condition of a permit issued by the
Department or by the United States Army Corps of Engineers.

(1b) Existing local compensatory
mitigation bank. - A mitigation bank operated by a unit of local government
that is a party to a mitigation banking instrument executed on or before July
1, 2011, notwithstanding subsequent amendments to such instrument executed
after July 1, 2011.

(2) Government
entity. - The State and its agencies and subdivisions, or the federal
government. "Government entity" does not include a unit of local
government unless the unit of local government was a party to a mitigation
banking instrument executed on or before July 1, 2011, notwithstanding
subsequent amendments to such instrument executed after July 1, 2011.

(3) Hydrologic area.
- An eight-digit Cataloging Unit designated by the United States Geological
Survey.

(4) Jurisdictional
waters. - Wetlands, streams, or other waters of the State or of the United
States.

(4a) Mitigation banking
instrument. - The legal document for the establishment, operation, and use of a
mitigation bank.

(4b) Private compensatory
mitigation bank. - A site created by a private compensatory mitigation provider
and approved for mitigation credit by State and federal regulatory authorities
through execution of a mitigation banking instrument. No site owned by a
government entity or unit of local government shall be considered a
"private compensatory mitigation bank."

(5) Unit of local
government. - A "local government," "public authority," or
"special district" as defined in G.S. 159-7.

(b) Department to
Coordinate Compensatory Mitigation. - All compensatory mitigation required by
permits or authorizations issued by the Department or by the United States Army
Corps of Engineers shall be coordinated by the Department consistent with the
basinwide restoration plans and rules developed by the Environmental Management
Commission. All compensatory mitigation, whether performed by the Department or
by permit applicants, shall be consistent with the basinwide restoration plans.
All compensatory mitigation shall be consistent with rules adopted by the
Commission for wetland and stream mitigation and for protection and maintenance
of riparian buffers.

(c) Compensatory
Mitigation Emphasis on Replacing Ecological Function Within Same River Basin. -
The emphasis of compensatory mitigation is on replacing functions within the
same river basin unless it is demonstrated that restoration of other areas
would be more beneficial to the overall purposes of the Ecosystem Enhancement
Program.

(d) Compensatory
Mitigation Options Available to Government Entities. - A government entity may
satisfy compensatory mitigation requirements by the following actions, if those
actions are consistent with the basinwide restoration plans and also meet or
exceed the requirements of the Department or of the United States Army Corps of
Engineers, as applicable:

(1) Payment of a fee
established by the Commission into the Ecosystem Restoration Fund established
in G.S. 143-214.12.

(2) Donation of land
to the Ecosystem Enhancement Program or to other public or private nonprofit
conservation organizations as approved by the Department.

(3) Participation in
a compensatory mitigation bank that has been approved by the United States Army
Corps of Engineers, provided that the Department or the United States Army
Corps of Engineers, as applicable, approves the use of such bank for the
required compensatory mitigation.

(4) Preparing and
implementing a compensatory mitigation plan.

(d1) Compensatory Mitigation Options
Available to Applicants Other than Government Entities. - An applicant other
than a government entity may satisfy compensatory mitigation requirements by
the following actions, if those actions meet or exceed the requirements of the
United States Army Corps of Engineers:

(1) Participation in
a compensatory mitigation bank that has been approved by the United States Army
Corps of Engineers, provided that the Department or the United States Army
Corps of Engineers, as applicable, approves the use of such bank for the
required compensatory mitigation. This option is only available in a hydrologic
area where there is at least one compensatory mitigation bank that has been
approved by the United States Army Corps of Engineers.

(2) Payment of a fee
established by the Commission into the Ecosystem Restoration Fund established
in G.S. 143-214.12. - This option is only available to an applicant who
demonstrates that the option under subdivision (1) of this subsection is not
available.

(3) Donation of land
to the Ecosystem Enhancement Program or to other public or private nonprofit
conservation organizations as approved by the Department.

(4) Preparing and
implementing a compensatory mitigation plan.

(e) Payment
Schedule. - A standardized schedule of compensatory mitigation payment amounts
shall be established by the Commission. Compensatory mitigation payments shall
be made by applicants to the Ecosystem Restoration Fund established in G.S. 143-214.12.
The monetary payment shall be based on the ecological functions and values of
wetlands and streams permitted to be lost and on the cost of restoring or
creating wetlands and streams capable of performing the same or similar
functions, including directly related costs of wetland and stream restoration
planning, long-term monitoring, and maintenance of restored areas. Compensatory
mitigation payments for wetlands shall be calculated on a per acre basis.
Compensatory mitigation payments for streams shall be calculated on a per
linear foot basis.

(f) Mitigation
Banks. - State agencies and mitigation banks shall demonstrate that adequate,
dedicated financial surety exists to provide for the perpetual land management
and hydrological maintenance of lands acquired by the State as mitigation
banks, or proposed to the State as privately operated and permitted mitigation
banks.

(g) Payment for
Taxes. - A State agency acquiring land to restore, enhance, preserve, or create
wetlands must also pay a sum in lieu of ad valorem taxes lost by the county in
accordance with G.S. 146-22.3.

(h) Sale of
Mitigation Credits by Existing Local Compensatory Mitigation Bank. - An
existing local compensatory mitigation bank shall comply with the requirements
of Article 12 of Chapter 160A of the General Statutes applicable to the
disposal of property whenever it transfers any mitigation credits to another
person.

(i) The
Ecosystem Enhancement Program shall exercise its authority to provide for compensatory
mitigation under the authority granted by this section to use mitigation
procurement programs in the following order of preference:

(1) Full
delivery/bank credit purchase program. - The Ecosystem Enhancement Program
shall first seek to meet compensatory mitigation procurement requirements
through the Program's full delivery program or by the purchase of credits from
a private compensatory mitigation bank.

(2) Existing local
compensatory mitigation bank credit purchase program. - Any compensatory
mitigation procurement requirements that are not fulfillable under subdivision
(1) of this subsection shall be procured from an existing local compensatory
mitigation bank, provided that the credit purchase is made to mitigate the
impacts of a project located within the mitigation bank service area and
hydrologic area of the existing local compensatory mitigation bank.

(3) Design/build
program. - Any compensatory mitigation procurement requirements that are not
fulfillable under subdivision (1) or (2) of this subsection shall be procured
under a program in which Ecosystem Enhancement Program contracts with one
private entity to lead or implement the design, construction, and postconstruction
monitoring of compensatory mitigation at sites obtained by the Ecosystem
Enhancement Program. Such a program shall be considered the procurement of
compensatory mitigation credits.

(4) Design-bid-build
program. - Any compensatory mitigation procurement requirements that are not
fulfillable under either subdivision (1) or (2) of this subsection may be
procured under the Ecosystem Enhancement Program's design-bid-build program.
The Ecosystem Enhancement Program may utilize this program only when
procurement under subdivision (1) or (2) of this subsection is not feasible.
Any mitigation site design work currently being performed through contracts
awarded under the design-bid-build program shall be allowed to continue as
scheduled. Contracts for construction of projects with a design already
approved by the Ecosystem Enhancement Program shall be awarded by the Ecosystem
Enhancement Program by issuing a Request for Proposal (RFP). Only contractors
who have prequalified under procedures established by the Ecosystem Enhancement
Program shall be eligible to bid on Ecosystem Enhancement Program construction
projects. Construction contracts issued under this subdivision shall be exempt
from the requirements of Article 8B of Chapter 143 of the General Statutes.